Popular sedans, the Maruti SX4, the Honda Civic and luxury cars may become cheaper by up to Rs 50,000, if a proposed duty cut being discussed by the government gets implemented. The ministry of heavy industries has written to the finance ministry to waive off the specific excise duty levied on mid-size and top-end cars last year.

The government had imposed an additional tax of Rs 15,000 on cars having engine size between 1,500-2,000cc and Rs 20,000 on all vehicles beyond 2,000cc. But the actual impact on the selling price of cars was much higher, as the tax was imposed on ex-factory price of vehicles over which consumers have to incur the burden of sales tax and other local levies.

The additional tax, which was to discourage consumers from buying the gas guzzling vehicles, has impacted sales of premium cars. Besides withdrawing the specific excise duty, the heavy industries ministry is also planning to extend help to multi-purpose vehicles, as they have been badly hit by the financial slowdown.

With the government reducing the duties it is for sure that the premium car market sales is set to boom or at least meet the desired growth level.